Earnings call transcript: Nanalysis Scientific misses Q4 2025 revenue expectations

Nanalysis Scientific Corp. (NSCI) reported a revenue of CAD 10.68 million for Q4 2025, falling short of the forecasted CAD 12.1 million by 11.74%. This miss contributed to a 10.34% drop in the company’s stock price, closing at CAD 0.13. The earnings call highlighted challenges in the Scientific Equipment segment and macroeconomic uncertainties impacting performance.

Nanalysis Scientific Corp. experienced a challenging quarter, with revenue declining by 13% compared to Q4 2024. The decrease was largely due to the Scientific Equipment segment, which faced macroeconomic headwinds and strategic divestitures. Despite these challenges, the company continues to focus on its proprietary product development and strategic partnerships to drive future growth.

The company reported revenues of CAD 10.68 million, missing the forecast of CAD 12.1 million by 11.74%. This significant miss highlights ongoing challenges within the company’s operations and market conditions.

Following the earnings announcement, Nanalysis Scientific’s stock price dropped by 10.34%, reflecting investor concerns over the revenue miss and declining profit margins. With the stock trading at $25.09, just 1% above its 52-week low of $25.00 and near its 52-week high of $25.46, the narrow trading range suggests limited investor confidence in near-term catalysts. The company’s market capitalization stands at $125.45 million. For deeper insights into NSCI’s valuation metrics and stock performance, investors can access comprehensive analysis through InvestingPro, which offers real-time Fair Value estimates and over 1,200 additional financial metrics.

While specific forward guidance was not provided, Nanalysis Scientific’s management emphasized a strategic focus on stabilizing its Security Services and expanding through partnerships. The company expects to benefit from supply chain optimizations and macroeconomic recovery, which should improve margins and profitability. Yet challenges remain significant—according to InvestingPro Tips, analysts do not anticipate the company will be profitable this year, and it was not profitable over the last twelve months. Investors seeking a complete picture can access all 3 additional ProTips, plus the comprehensive Pro Research Report that transforms complex data into actionable intelligence for NSCI and 1,400+ other US equities.

CEO Sean Krakiwsky stated, "2025 will be the last year that you hear me say we had to deal with certain challenges associated with past acquisitions." He highlighted the company’s efforts in navigating supply chain challenges and securing alternative suppliers to reduce costs.

Interim CFO Heather Kury noted, "The company is actively working with its customer to address these dynamics and remains confident in reaching a more sustainable, mutually beneficial operating arrangement going forward."

The earnings call concluded without any analyst questions, although management invited follow-up inquiries, indicating a willingness to engage further with analysts and investors.

Jake Bouma, IR Consultant, Nanalysis Scientific Corp.: Good morning, everyone. Welcome, and thank you for joining the Nanalysis Scientific Corp.’s Q4 2025 earnings call. I am Jake Bouma, an IR consultant for Nanalysis. Today on the line discussing Nanalysis Q4 2025 financial results and company highlights are the company’s President and CEO and Founder, Sean Krakiwsky, and the Interim CFO, Heather Kury. Following their remarks, we will open up the call to an analyst Q&A session. Before handing over the call to Sean and Heather, please note that information we present today could contain forward-looking information that is based on management’s expectations, estimates, and projections. Please consider the risk factors, including those in the filings made by Nanalysis on SEDAR when reviewing this information. Also, all amounts discussed will be in Canadian dollars unless otherwise noted. With that, I would like to turn the call over to Nanalysis Interim CFO, Heather Kury.

Heather Kury, Interim CFO, Nanalysis Scientific Corp.: Thank you, Jake, and thank you to everyone joining us on the call today for taking the time out of your day to allow us to share with you the progress we are making here at Nanalysis. I’ll begin by walking us through the financial results for the fourth quarter, which ended December 31st, 2025. As Jake mentioned, all amounts are referenced in Canadian dollars. For the three months ended December 31st, 2025, the company reported consolidated revenue of CAD 10.7 million, a decrease of CAD 1.6 million or 13% from the comparative period in 2024. The majority of the decrease was within the Scientific Equipment segment, which was impacted by macroeconomic uncertainty and the shedding of our third-party resale businesses. Security Services revenue remained flat year over year, with flow through inventory revenue decreasing slightly, which is offset in cost of sales.

Gross margin percentage for product sales for the three-month period ended December 31st, 2025, was 56% versus 60% from the comparative period in 2024. This decrease was attributable to earlier period supply chain challenges, which required the company to utilize higher cost labor to meet its sales commitments. While gross margin for Q4 2025 was 4% lower compared to Q4 2024, gross margin for the 12 months ended December 31st, 2025, increased by 4% over the same period in the prior year due to continuous improvement programs within manufacturing. Gross margin percentage for Security Services for the three-month period ended December 31st, 2025, was 11% versus 16% from the comparative period in 2024, reflecting both revenue variability and cost structure dynamics associated with the company’s largest contract, as well as the company’s commitment to maintaining a high level of customer service.

The company is actively working with its customer to address these dynamics and remains confident in reaching a more sustainable, mutually beneficial operating arrangement going forward. Adjusted EBITDA for the three months ended December 31st, 2025, was CAD 1.2 million versus an adjusted EBITDA of CAD 1.8 million from the comparative period in 2024. Normalized net loss was CAD 729,000 for the three months ended December 31st, 2025, which is an increase of CAD 329,000 from the comparative period in 2024. This was primarily the result of a drop in Scientific Equipment sales in the quarter. With that, I’ll turn the call over to our Founder and CEO, Sean Krakiwsky. Sean?

Sean Krakiwsky, President, CEO, and Founder, Nanalysis Scientific Corp.: Thanks very much, Heather. Thanks to everybody for joining our call today. As Heather referenced, and as we mentioned in the press release summarizing our year-end financial results, we faced many challenges in 2025. I guess I would put our challenges into two buckets. The first bucket being related to the previous acquisitions that we had done, changes in management, shedding of businesses that were not deemed to be of future value for us, and so on. 2025 will be the last year that you hear me say we had to deal with certain challenges associated with past acquisitions. I’m very proud to say that we’ve managed those turbulent waters well, and we’ve removed the parts of our businesses that aren’t going to contribute to value creation going forward.

Then we’ve polished up the things that we have acquired that are in fact going to contribute to value creation going forward. Couple of more specific examples of those things is that we inherited reseller businesses associated with Agilent equipment and also a European preclinical MRI company called Mediso. Throughout 2025, in sort of a gradual, orderly fashion, we stopped representing those companies. Those were low margin, low volume businesses for us. Now we’re super focused on only selling our proprietary products. Of course, I’m referring to the Scientific Equipment segment of our business. Really happy to be able to focus in on our own products rather than representing others.

The second bucket of challenges that I guess we’ve had to deal with in 2025, I’ll call them macroeconomic or geopolitical in nature, and those affected capital equipment budgets globally, and then some pretty significant supply chain challenges, in particular associated with rare earth metals and the magnets we use in our magnetic resonance products. Very happy to say that although that was a difficult challenge that created a lot of consternation for us, especially sort of in the third quarter and into the beginning of the fourth quarter, it’s turned out to be kind of a blessing in disguise, most particularly with regards to its effect on our costs. We’ve been able to find alternative suppliers.

We’ve tackled some material sciences challenges associated with magnet composition and specific heavy rare earth element restrictions that have existed in China, and navigated those waters and come out of this with magnets that are much lower cost and still serve our purposes. Very proud of our team’s efforts in that regard. Those were the things that we were dealing with in 2025. Maybe I’ll now talk about some of the highlights associated with that. We have rebounded with regards to Adjusted EBITDA, and when you look at that fourth quarter number and you look at the year, it is emblematic of our potential going forward. We once again showed that we have very supportive shareholders, especially in these tough micro-cap equity markets. Our shareholders once again showed that they’re supporting the company going forward, as is evidenced by our closing of our CAD 3.4 million equity raise.

We also have great relationships with various government agencies that are supporting growth of Canadian companies, especially Canadian companies that are exporters and manufacturers, as evidenced by the announcement that we were awarded CAD 1 million of non-dilutive, non-repayable monies to support our business going for